Strength attributed to takeover chatter - Keysight rumored as a potential acquirer with price chatter in the mid-$20s
PF US - Hearing takeover chatter circulating CAG speculated as possible suitor
Match Group’s Tinder app has shareholders swiping right.
The dating site’s parent company saw its shares jump 5.5 percent on Tuesday, to $18.75, after an analyst highlighted an unexpected acceleration in Tinder’s paid members.
Piper Jaffray’s Samuel Kemp increased his paid-member estimate for the app by 340,000 in the second quarter — up from a previous forecast increase of 175,000.
The analyst said the acceleration in paid members could add as much as 2 percent to Match’s second-quarter revenue — enough for him to boost his target price for the Dallas-based collection of dating services to $23 from $21.
And that’s before any of Tinder’s much-anticipated product improvements roll out in the second half.
Among those the new products is a “Likes You” feature announced last month as part of the company’s paid, Tinder Gold tier of services.
Tinder users swipe right on the images of potential matches they find attractive and swipe left on those they don’t.
Tinder touted the feature as “bringing all of your pending matches to you” — but its appeal may be to those so afraid of rejection they’d rather pay a premium than risk a swipe left.
Tinder said it’s testing “Likes You” overseas but declined to give it a U.S. launch date.
Kemp said he uncovered the paid-members uptick by analyzing Tinder’s rankings among app-store downloads and their implications for subs.
The 15 percent gain he now sees for the second quarter, which would take paid membership for Tinder to 2.2 million, speaks to “the sustainability of its business model,” he said.
FILED UND
Aviva offloads Friends Provident International to wealth group
Insurer continues non-core disposals with sale of lossmaking unit to specialist RL360
Aviva has sold its lossmaking Friends Provident International unit for £340m to RL360, a specialist in offshore wealth management.
The UK insurer took control of the business, which advises clients in the Middle East and Asia, when it bought Friends Life for £5bn two years ago. But it had increasingly looked non-core, and Aviva said this year that FPI’s future was under review. FPI reported a £2m loss last year.
The bulk of Friends Life has already been integrated into Aviva.
The move is the latest in a string of disposals by Aviva as it looks to narrow its focus on a small number of core markets. It has already sold businesses in France and Spain this year, and has shaken up its Hong Kong operation by setting up a joint venture with Tencent and Hillhouse Capital.
Chris Wei, executive chairman of Aviva Asia, said the disposal was “a good outcome for Aviva”. He added: “It allows us to focus on the significant opportunities we have to grow Aviva’s business across Asia through digital and disrupting the traditional insurance industry.”
The disposal process could have further to run. Analysts at UBS pointed out on Wednesday that “other businesses remain under strategic review including India/Taiwan and Italy along with further shareholdings in Spain”.
RL360 started life six years ago as a management buyout from insurer Royal London. Following a series of acquisitions, it now has an embedded value, a measure of net assets, of about £1bn.
Aviva, which will book a £130m loss on the disposal, said the deal would add £100m to its capital surplus under Solvency II rules. It also said that the sale would improve its capacity to pay dividends.
The insurer has embarked on a £300m share buyback scheme that was announced in May, and is interested in bolt-on acquisitions. It has been an enthusiastic investor in technology companies that could be relevant to the insurance market. It recently led a £5m investment round in Neos, a home insurer which says it can detect and help prevent fire, theft and water leaks.
Barrie Cornes, analyst at Panmure Gordon, said: “FPI didn’t sit comfortably within Aviva and so it is no surprise that it is being sold . . . We view this disposal positively.”
Aviva is due to report its first-half results next month.
RL360 was advised by Fenchurch Advisory Partners. Aviva was advised by Goldman Sachs.
NXP/Qualcomm Facing Delay in Europe and Complaints in China
Gapping down
In reaction to disappointing earnings/guidance:
In reaction to disappointing earnings/guidance:
- HDP -7.9%, (announces Pres/COO departure and mgmt changes; expects Q2 total GAAP revenue of $58-59 mln vs $57.2 mln consensus),CSX -4.5%, NTRS -4.5%, UAL -3.9%, IBM -2.8%, IBKR -2%, CCI -2%, NAVI-0.6%, .
Other news:
- DRYS -29.3% (to effect a 1-for-7 reverse stock split of the Company's issued common shares)
- CYCC -26.8% (filed Form EFFECT (Notice of Effectiveness) for an S-1, which was described in an S-1MEF filing)
- SPEX -19.1% (after filing another amended S-1 with offering of approx 1.18 mln shares of common stock)
- OHGI -11.4% (discloses entry into securities purchase agreement with two investors)
- INO -9.2% (to offer $75.0 mln of shares of its common stock in an underwritten public offering)
- GLPG -6.1% (ticking lower; attributed to VRTX news)
- MMYT -4.6% (files for 15,357,028 ordinary share offering by shareholders)
- NSC -1% (plans to consolidate its Central Division headquarters operations in Knoxville into three surrounding divisions; move will affect a total of about 50 employees)
- UNP -0.9% (CSX sympathy)
Analyst comments:
- FBHS -1.1% (downgraded to Market Perform from Outperform at Wells Fargo)
- PYPL -1% (downgraded to Hold from Buy at SunTrust)
- AMC -0.7% (downgraded to Equal Weight from Overweight at Barclays)
- CMG -0.7% (downgraded to Market Perform from Outperform at BMO Capital Markets; downgraded to Market Perform from Outperform at Wells Fargo)
Facebook target raised to $185 at Needham
Needham raises their FB tgt to $185 from $165 as user growth has outpaced firm's ests and their channel checks indicate more robust advertising revenue growth than they previously projected owing to more video ads (i.e., higher CPMs), faster Instagram revenue growth, and lower competition from SNAP than they had previously projected. Firm now believes FB is becoming the de facto near-monopoly mobile choice for brands and direct response (i.e., lead-gen) advertisers. FB will report 2Q17 earnings on Wednesday, July 26, 2017 after the market closes and will host a conference call at 5 pm ET.
Bernstein Quants Say Economy, Earnings to Stimulate Equity Flows
Improving outlook for economy and corporate earnings growth, as well as uptick in inflation expectations, to bolster case for inflows into equity funds, write Bernstein quant strategists led by Inigo Fraser Jenkins.
- Slowdown in purchases of both equity and bond funds in recent weeks shouldn’t be concerning to equity investors
- Total flows to equity funds remain positive and recent slowdown could be nothing more than consolidation after strong 1Q and 2Q buying
- Week ending July 12, equity funds attracted $4.9 billion, compared with $4.4 billion to bond funds: Bernstein
Deutsche Bank Reiterates FSLR with Hold, price target: $47
- Firm notes they have been highlighting some of the recent developments around section 201 trade case as well as stronger S6 execution as the key drivers for near term positive share price performance.
- Firm believes there are several factors that could continue to drive this near term positive momentum. Although initial feedback on S6 execution has been positive, they also acknowledge that some risks still remain and further evidence of successful S6 ramp would be required for sustained outperformance.
- Firm sees upside to Q2 estimates, primarily driven by better than expected component margins as well as revenue recognition of Switch Station project (not baked into guidance).